As the latest addition to the Sterling team, I have spent my first weeks getting to know my coworkers and learning the business. I recently had the pleasure of talking with CEO Marianne O’Connor and learning about the certification of Sterling Communications as an official woman-owned business (VON# 21000709) under California’s Utility Supplier Diversity Program administered by the Public Utilities Commission. Such designations, and the government services exchanges that manage them, are designed to encourage government contractors to actively seek diverse suppliers and include minority-owned businesses in their supply chains.
The idea is to better level the playing field for business opportunities, but supplier diversity programs are rooted in solid commercial rationale. According to Harvard Business Review, “An inclusive procurement strategy widens the pool of potential suppliers and promotes competition in the supply base, which can improve product quality and drive down costs. And by providing more sourcing options, inclusiveness can make supply chains more resilient and agile.”
As HBR explains, “A diverse supplier is a business that is at least 51% owned and operated by an individual or group that is part of a traditionally underrepresented or underserved group. Common classifications are small-business enterprises (SBEs), minority-owned enterprises (MBEs), and woman-owned enterprises (WBEs). Over time, the definition of diversity has expanded to businesses owned by other minority groups such as LGBTQ, veterans, and proprietors with disabilities.”
Supplier diversity is just one pillar in the growing environmental, social, and corporate governance (ESG) movement sweeping business globally, even beyond government contracts. According to PwC, ESG standards increasingly influence company operations and are criteria used by many investors, representing “risks and opportunities that will impact a company’s ability to create long-term value.” ESG standards typically address sustainability and resource scarcity, diversity and inclusion, as well as data security and transparency.
Though we are just one small communications company, Sterling’s official certification shows that our clients, the government, and contractors can trust that Sterling meets WBE criteria and that contracting our stellar services contributes to equitable commerce. Here is a recap of my chat with Marianne about the certification process:
What motivated Sterling’s pursuit of certification as a woman-owned business?
Marianne: If I’m honest, it was client driven. One of our clients is regulated by the California Public Utilities Commission, so they requested that we get certified. They knew Sterling was a woman-owned business but were eager for us to get the third-party certification. To make that happen, they helped us navigate the entire certification process.
What did the certification process entail?
Marianne: We had to gather corporate documents to submit with the application form so that reviewers could make sure Sterling was a for-profit corporation at least 51% owned by a woman. After submitting the application, it took roughly three months for the certification to be granted. I’m really glad we did it; having the third-party certification is an important credibility piece for us as a company.
How has the certification impacted Sterling’s business?
Marianne: Sterling’s focus is on healthtech and cleantech, and these are industries where ESG standards are increasingly important. Prospective clients in these areas will hopefully be interested in working with Sterling because we can verify contribution to their diversity goals…and it makes moral, ethical, and economic sense for them to work with diverse suppliers.
When they do that, they help underserved and underrepresented populations to create a stronger, healthier economy. And embracing diversity attracts employees who want to work for a company that gives everyone a fair shot, not just the friends of the C-suite. I think the next generation of investors and shareholders will place even greater emphasis on diversity, and smart companies will get on board sooner rather than later.
This certification is a good thing to do. More companies need to know about it and understand the full range of their choices in suppliers. Now Sterling is listed in a public clearinghouse of minority businesses that people can and will access when looking to put future contracts out to bid.
Do you have any words of encouragement for women looking to get their businesses certified?
Marianne: Because I didn’t come from a disadvantaged background and I’m not a person of color, I don’t necessarily identify with being a “minority.” But the fact is that women have been a minority in business ownership for a long time, though I just read in Forbes that between 2014 and 2019, the number of women-owned businesses grew 21%; that’s more than double the growth rate for businesses overall!
We have to get comfortable with the idea that we’re not asking for something more than what’s due. Instead, we’re letting people know that women are capable and available to do all types of work. So, what I’d say to other female business owners is this: If your business qualifies as a diverse supplier, make it public. You may be doing well, but you can always do better – give yourself additional opportunities for visibility. Going through the certification process is one of the ways you can stand up, stand out, and stand for something.